Live in Alabama. Applying for a land loan to later build on. 10% seems really high when my 30 year fixed mortgage is at 6.25% from a couple years ago.
2006-07-09 14:53:41 · 5 answers · asked by edmonrj 2 in Business & Finance ➔ Renting & Real Estate
Never get an ARM if you can afford it. The balloon payment will kill you. And no, that seems like a high rate.
2006-07-09 15:01:04 · answer #1 · answered by mosesqueenofegypt 2 · 0⤊ 0⤋
That sounds like a horrible rate but it may depend on how much you're borrowing.
Are you borrowing more than the value of the land, thinking that you'll use the money for construction later? If so then that would explain the higher rate. It might be a better idea if you borrow only as much as you need to purchase the property right now. When it's time to build you can go for a construction loan that will turn into a permanent mortgage when you finish building and it will incorporate the land loan as well. That will probably have a much more favorable interest rate.
Try speaking with a loan officer at a bank that offers construction loans. Unless there is something very unusual about the property you should be able to get a much better rate.
2006-07-09 22:02:24 · answer #2 · answered by Anonymous · 0⤊ 0⤋
For a land-only rate, that is fairly typical but you might want to shop around a bit.. You'll do far better if you buy the land and build at the same time. Your construction & land purchase loan will be in that region, but once your home is built you can roll it into a conventional loan.
You can also buy the land now and roll it into a conventional loan at market rates once you build.
2006-07-09 22:30:11 · answer #3 · answered by Bostonian In MO 7 · 0⤊ 0⤋
If you need a construction loan for this land, contact me. If you are just buying the lot and are not quite ready to build, you can get a lot loan for somewhere near prime, Interest only payments required (while you investigate your options), I can also help you to secure financing from my nationally known company.
For the record, prime is at 8.25%, so 10%, depending on your qualifications and income documentation, is not that far off of the mark!
2006-07-10 12:37:17 · answer #4 · answered by mzfilly 2 · 0⤊ 0⤋
too high. should not exceed 6.75%, under any circumsances, with bureau between 700-750.
2006-07-10 12:08:34 · answer #5 · answered by rightonrighton 3 · 0⤊ 0⤋